The overhead volume variance relates only to
A) variable overhead costs.
B) fixed overhead costs.
C) both variable and fixed overhead costs.
D) all manufacturing costs.

Question

Quizplus · Accepted Answer

The overhead volume variance only relates to fixed overhead costs. It measures the difference between the budgeted fixed overhead costs and the actual fixed overhead costs incurred due to changes in the level of production activity. Variable overhead costs are captured by a separate variance, the variable overhead efficiency variance.

The Overhead Volume Variance Relates Only to